An institutionalist approach to SMEs : the role of power relations and transaction costs

Lah, Marko (author), Sušjan, Andrej (author)

The article attempts to combine Alfred Eichner’s institutionalist theory of the megacorp and a corresponding definition of small and medium-sized enterprises (SMEs) with transaction cost theory (TCT) based on firms’ asset specificity. We have identified three types of SMEs: subcontracting SMEs as “spokes” within hub-megacorp network, independent SMEs as local competitors of megacorps, and SMEs as partners in cluster networks. The article outlines some distinctive features of the three types and then concentrates on subcontracting SMEs, presenting their submission to megacorp’s power through mark-down pricing and their consequent inability to grow. We mention some illustrative examples from Slovenia, a small transition economy, in which many SMEs have been part of international megacorps’ supply chains. We conclude that TCT, in spite of its neoclassical paradigmatic background, enriches the institutionalist approach to SMEs without changing its evolutionary character, inherited from old institutionalism.

• Language: English
• Keywords: SMEs, institutionalism, post-keynesianism, theory, small and medium-sized enterprises, Eichner’s megacorp, institutionalist theory of the firm, post-Keynesian economics, transaction costs
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: FDV - Faculty of Social Sciences; EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2022
• Number of pages: Str. 721-740
• Numbering: Vol. 56, no. 3
• PID: 20.500.12556/RUL-141895
• UDC: 330.1
• ISSN on article: 0021-3624
• DOI: 10.1080/00213624.2022.2079933
• COBISS.SI-ID: 123865859
• Publication date in RUL: 11.10.2022

Record is a part of a journal

• Title: Journal of economic issues
• Shortened title: JEI. J. econ. issues
• Publisher: Taylor & Francis
• ISSN: 0021-3624
• COBISS.SI-ID: 247833

Licences

• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.

Secondary language

• Language: Slovenian
• Keywords: majhna in srednja podjetja, institutionalizem, postkeynesianizem, teorija